Programs of environmental performance rating and public disclosure as well as stakeholder dialogue have been piloted in China, Indonesia, Ghana, Ukraine and several other countries with the help of the Development Research Group. Research is being conducted in order to better understand the mechanism as well as the effectiveness of the programs and to improve the design and implementation of the approaches. Public disclosure and stakeholder dialogue are found to be effective environmental management strategies.

Stakeholder dialogue, as an alternative institutional strategy for environmentally and socially sustainable development, has received little attention from researchers and practitioners in developing countries such as China, even though the dialogue strategy can potentially lead public governance to a more efficient level. This paper first discusses the potential of stakeholder dialogue as an institutional tool for promoting sustainable development in China, and then presents a pilot program of stakeholder dialogue recently developed in China -- the community environmental roundtables. Community leaders organize roundtable dialogues where representatives from government agencies, companies and the local residents exchange their views toward certain environmental issues they are facing and discuss possible ways to resolve the issues. Informal agreements are reached during the dialogues and implemented after them. This community roundtable dialogue strategy has been piloted in dozens of Chinese municipalities, addressing various environmental issues. A survey of dialogue participants shows that significant impacts have been generated on environmental protection, community management, as well as social and institutional development at the community level. Mutual understanding and trust among the government, companies, and local citizens are enhanced, environmental and social conflicts are reduced, and the public performance of various parties has been improved. This approach is expected to help solve other conflicts and public governance issues in China as well. The potential challenges of institutionalizing such a program in China are also discussed in the paper.

"Environmental performance rating and disclosure: China's GreenWatch program," Hua Wang, Jun Bi, David Wheeler, Jinnan Wang, Dong Cao, Genfa Lu, and Yuan Wang, Journal of Environmental Management 71(2), 2004. (Based on World Bank Policy Research Working Paper 2889, 2002)This paper describes a new incentive-based pollution control program in China, in which the environmental performance of firms is rated from best to worst using five colors -- green, blue, yellow, red and black -- and the ratings are disseminated to the public through the media. We focus on the first two municipal disclosure programs, which have been implemented at very different levels of economic and institutional development. In both cases, the increases in compliance with pollution regulations have been similar to increases produced by public disclosure programs in Indonesia, the Philippines, and Vietnam. The results suggest that incentives created by public disclosure may significantly reduce pollution in China, even though environmental NGO's play little role and there is no formal channel for public participation in environmental regulation.